Solving the challenge of insurance accessibility

A new study has revealed that Australia lags woefully behind other countries when it comes to life insurance accessibility and affordability—with a score of 0.47—well below the advanced market average of 0.67 and even that among emerging markets of 0.53. Concerningly, almost half of Australians currently have no life insurance policy—and no intention of getting one.

At the same time, we’re seeing the rise of an increasingly digital consumer who prefers to buy online—and yet many life insurance providers lack the capabilities needed to sell their products directly to consumers through digital channels.

So, what’s causing Australia’s chronic underinsurance problem, and could digital channels for direct insurance be the solution?



Understanding the insurance gap

Insurers are currently facing challenges on multiple fronts. Their supply pipeline of financial advisers is shrinking, but the federal government is ramping up pressure to ensure that access to life insurance is within reach for ordinary Australians. And while almost one-third of Australians hold life insurance policies through their super fund, many won’t be aware that the median default cover only meets approximately 65% to 70% of basic level death cover needs for average households.

In insurance, we often speak about the “moment of truth”: either suffering a financial impact from being uninsured or receiving a claim payout from an insurance policy. But the fact is, people don’t experience the same moment of truth in life insurance. Although they may become the beneficiary of a family member’s life insurance policy, this statistically tends to happen much later in life—well past the age when taking out life insurance is cost-effective and most beneficial.

This explains the traditional view that life insurance is sold, not bought, which in turn has led to very small direct channels compared with other types of insurance. In 2023, 45% of car insurance and 42% of health insurance is taken out online—compared with just 14% of life insurance. While life insurance may never have the same model as general insurance, it’s time for insurers to start exploring digital channels, particularly in light of the current challenges facing the industry.



Making the most of the opportunity

Among the younger tech-savvy generations of Australians, there’s a growing cohort who would access life insurance through direct channels if this option was readily available. So, the question becomes, how can insurers set up direct channels with the efficiency and appeal to tap into this potential customer base?

For example, we can look at the millennial cohort as one such opportunity. As millennials age, their parents are starting to reach the point where life insurance is becoming crucial—so they may be thinking deeply about life insurance for the first time. We also know that this group is confident making their own purchases without an intermediary like a financial adviser or agent. They’re very comfortable jumping online to do their own research, narrow down what they want, and buy it for themselves.

In order to connect with millennials, you need to be offering convenient self-service options with built-in speed and efficiency, which deliver detailed information around your products as well as the ability to make policy adjustments. It’s crucial to have a robust digital platform that will enable you to meet customer expectations, but with the flexibility to adapt quickly to changing market needs or to support different marketing campaigns.



How to set up a digital channel

Having the right technology is key to building more effective digital channels that will drive growth for your business. Any direct digital solution must have the capability to tailor products to the audience, particularly at key life events such as buying a house or starting a family. At the same time, the products on offer need to feel simple and straightforward, to encourage users to complete the purchase without becoming overwhelmed by complexity or too many options.

Remember that consumers have come to expect an enhanced and seamless online shopping experience from successful web marketers such as Amazon, JB HiFi, and Kmart and now look for the same in all digital channels.

That means your digital channel should include:


An expert technology partner can help you implement a flexible system with a full regression test suite that allows for quick A/B testing and the ability to daily roll out changes. One key benefit of a digital system is that it collects rich data insights that can be used to analyse customer trends and behaviours. Talk to your technology partner about a digital solution that feeds event data directly into a data lake, delivering an instant feed of market knowledge to help shape the best products for your customers.

Finally, you should also consider partnering with other businesses to bundle your insurance offering with related products that are of interest to your target demographic. For example, for millennials seeking out life insurance during key life events, you might partner with baby clothes retailers, real estate agents, or builders.


Whether you’re looking for an innovative platform to support business growth, you’re over capacity and need to outsource a project, or you’re in a jam and need a rapid solution, Axe is ready to support you.